Hi Mark,

Your argument appeared to be:

1) Stalin used utilitarianism to justify enslaving a minority for the greater good
2) Therefore, utilitarianism is immoral.

To quote the (almost) entire paragraph:

“but assuming your ‘methodolgy’ led you to falsely discover that ’sound economic theory’ dictated the greatest good for the greatest number of people was served by a tyrant such as Stalin – let’s call him the omniscient allocator – enslaving completely a minority, or even just the single individual, to the good of the ‘greatest number of people’ – let’s call them the mob – so that individual’s freedom was surfeit and thus expendable, do you still feel it is not your job as an economist to make a value judgement about the consequent policy you would be recommending through this blog, and, Ayn help us, your job? Are you finally going to call this ‘right’ or ‘wrong’?”

An economist doesn’t say – lets enslave this group or value this groups happiness above another. An economist tries to find the trade-offs inherent in choices, the example of Stalinist policies seems to ignore the trade-offs by shifting to a random extreme POV.

Following this I am concerned that the point of what I am saying may not be clear, as a result let me try to restate what I am trying to do here with these posts on the budget.

Fundamentally, I have stated that there is an economy where people make choices and face trade-offs, and there is a number of institutions including government. The libertarians are one of a number of parties who want to guide the choices of government – which thereby impacts on everyone else.

Looking at the trade-offs that occur when the government makes a choice, the policies the Libertarians want to put in place imply a different weighting of these trade-offs than other parties. That is all.

I called it extreme because, if we drew a continuous line of possible policies from government, you guys would fall on the edge of the line – not because I am stating I am personally against anything.

When I vote, as a person, I will make value judgments on these issues. When I try to recognise trade-offs as an economist I will just try to list down trade-offs. I hope this makes the distinction I am trying to make clearer.

Excellent points Rachel.

And overall, as you say, there are a continuum of levels of redistribution. We have to apply additional value judgments before we could infer that “no tax” is the optimal one.

For the record, look at my post: I did not state it in the manner you suggest. I made the extreme example to make the point.

First off I think the role of private charity is an important point to make when talking about optimal redistribution, as some of the slack will be picked up by private charities. Of course there is a free-rider problm when it comes to private charity that will make redistribution sub-optimal compared to a rawlsian type social contract, however I don’t believe there is any reason to view this as inherently less optimal than the level of redistribution chosen by the democratic process which won’t reflect the rawls social contract since people already know their postion in the world. So as you say the libertarianz assume that the optimal level of govt enforced redistribution is zero, I agree it is unlkely to be optimal from a social contract sense but from a ‘best available option’ sense it may well be (and my idealogical leanings would suggest it is, but of course there is plenty of room for debate).

Secondly, (and this is a bit of a pet peeve of mine) is that all the talk of social contracts when talking about national policies seems to implicitly assume only people within that nation count and also all citizens don’t care about non-citizens. If we put equal weight on every person in the world then the optimal level of redistribution within NZ is probably zero and any redistribution would be taking from NZers and giving to overseas. I don’t believe the libertarianz budget had any foreign aid in it, however it could well be the case that the efficiency advances from their budget could increase the amount of private charity that goes to, say, African causes and in my social welfare function where every person in the world is given equal weight, then this is closer to the optimal level of redistribution. Of course there is debate as to what the appropriate weight for non-citizens should be if we are going to use a social contract framework for national policy, but it irritates me that it is so often implicitly assumed to be zero.

So basically I believe there is adequate reason to believe the optimal level of government redistribution (given feasible options) within NZ could quite likely be zero, without even having to touch a ‘taxation is theft’ argument.

Defining a level of redistribution is involves more of a value judgment than having it as an undefined figure between 0 and X. Having it as an all encompassing set implies that we are simply describing the situation around redistribution – setting it to a figure (even zero) implies we are saying that, given that situation, this outcome is preferable.

Given the values you place on certain elements I have no doubt that the zero redistribution outcome is perfectly consistent. But it does involve making those moral judgments rather than leaving them empty. Not reaching a conclusion (as I have done) means that some moral judgments have been left empty.

I would say that economics, before making conclusions, is nearly as value-free as science. I would also note that in absolutist terms nothing is value-free. When I am stating that we are avoiding “some value judgments” my implication is that we are trying to focus on descriptive issues without inserting values that allow us to reach a conclusion.

So is economics a value-free science?

No. It’s not.

You are criticising the value judgments made by people when they determine policy – this is not economics.

My post was pointing out the fact that the Libertarians have made an extreme value judgment – I was not saying it was wrong, that is not my place. However, it is a fact.

Now, if you guys want to say why you believe you are making an appropriate value judgment go for it – that is cool. And people could discuss that given their own beliefs. However, there is nothing in economics that would allows me to reach a conclusion – if I say I think something is “right” or “wrong” I recognise I’m wearing a different hat.

FYI, trying to compare anyone that suggests the possibility of intervention to Stalin is patently ridiculous. I realise you feel strongly about the issue, but this is on the verge of Godwin’s law …

Hi Mark,

I would say that, in essence, it is my definition of utilitarianism that is likely to be weird rather than my description of economic analysis.

My view is that the frame of economic analysis allows us to describe what is going on in social situation and in society – but it does not tell us what is “right” or “wrong”. I view utilitarianism as a tool to help us build a framework for description, and I only see it as a “moral framework” once we introduce additional value judgments required to reach a conclusion.

This is the gap I keep talking about. Economics is the study of scarcity, describing scarcity, describing choices given scarcity, given institutions etc etc. But you can only reach a “conclusion” only make a moral judgment about what is “right” or “wrong” once you apply value judgments to this framework.

“But at least with his citation Matt is now conceding that his economics is indeed based upon implicit values, albeit dire ones.”

Two things with this:

1) When I reach a conclusion that isn’t just economics, but my value judgments as well. I will always concede that – as I’ve always said you can’t reach any conclusion without value judgments.

2) I agree that even before reaching a conclusion often we have to make some types of value judgments. But it becomes a matter of degree. Saying “optimal redistribution is zero” involves MORE value judgments than “optimal redistribution relies on value judgments”. I am making the second statement.

Thankfully, I know that pursuant to objective reality the following scenario is false, but assuming your ‘methodolgy’ led you to falsely discover that ‘sound economic theory’ dictated the greatest good for the greatest number of people was served by a tyrant such as Stalin – let’s call him the omniscient allocator – enslaving completely a minority, or even just the single individual, to the good of the ‘greatest number of people’ – let’s call them the mob – so that individual’s freedom was surfeit and thus expendable, do you still feel it is not your job as an economist to make a value judgement about the consequent policy you would be recommending through this blog, and, Ayn help us, your job? Are you finally going to call this ‘right’ or ‘wrong’?

Personally, I think you had better start thinking about what is important, about the pursuit of happiness, your happiness, and start voting in the next election accordingly. Until you do so, as with everyone like yourself, you’re the most dangerous man in New Zealand.